Wednesday, September 29, 2010

AAI-H ... great organization ... I think ... but meaningful metrics are missing

Dear Colleagues

I am a member of many Internet communities that have dialog about relief and development including the group "Networking for Development" at Ning

Many of the people who are members of this group are doing very interesting and valuable work. The following is an example:

In this profile there is the AAI-H organization's website which shows some interesting activity by this organization.

I downloaded the 2009 Financial Report and the 2009 Annual Report and was totally disappointed in what I found. This is not to say that the organization is good and worthwhile or not ... it is merely to report that the Financial and the Annual Reports are totally useless as reports on the progress of society, and the performance of this organization.

This is not the fault of the organization, it is the failure of the accounting profession and other related disciplines to get to grips with what is needed.

The Financial Report is prepared following all the rules of GAAP accounting and audit ... and in the end says almost nothing about the performance of the organization beyond confirming that they followed the rules. In terms of performance metrics, the financial report is a complete waste of time and money ... though it is good to know that the organization was following the rules.

The Annual Report is a standard picture book about the activities of the organization ... good journalism and following the methods of modern "communications" with pictures and numbers giving a sense of reality for the story. In terms of performance there is absolutely nothing that helps to position the organization as good, bad or indifferent. Clearly the donors "like" the organization, and that is good ... but what the organization does with the money to produce progress and where the organization is efficient or not is ignored completely in the presentation ... both the financial presentation and in the stories of the Annual Report.

As I observed already ... this is not the fault of the organization. They are following the norms of the international relief and development industry which has completely avoided any system of accounting and reporting that addresses progress and performance with meaningful data.

Needless to say ... this confirms again the need to get something like The Burgess Method for value accounting deployed as soon as possible.

Stay tuned

Peter Burgess

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